U.S. Imposes New Sanctions on Russian Oligarchs, Government Officials; Dow Drops After Trump Threatens China With More Tariffs; Pruitt: Will He Stay or Go? Trump Attorney Requests Extensions to Respond to Daniels Lawsuit. Aired 10-10:30a ET

Aired April 6, 2018 - 10:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[10:00:00]

MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: So among this bunch, we are looking at the head of the huge state-owned gas company Gazprom. We're looking at the head of the Russian National Guard. We're looking at Vladimir Putin's son-in-law, at Putin advisers, as well as billionaires, like Oleg Deripaska. He's alleged to have had ties with former Trump campaign chairman Paul Manafort and his partner Rick Gates, both who have been indicted in the Robert Mueller Russia investigation.

So, these are clearly senior level people, both in Russian business, and Russian political circles, as well as the Russian government. But we're not looking at an enormous number of people. Remember, it was months ago in January, Congress passed this law, mainly to punish Russia for meddling in the U.S. election. As a result of that law, the State Department and Treasury needed to draw up a list of people like this who they could sanction, so there were nearly 100 oligarchs in that list. There were 100 more people on the prominent Russians list, including Russian senior officials. And the administration chose not to sanction them right away, when this list came out. Again, this was in January.

So, back then we were looking at a list of some 200 Russian people who could be targeted. And now there are seven oligarchs and 17 senior government officials. So this is clearly a start. It is part of the administration's effort to get tougher on Russia. But there are clearly questions to be asked here.

First of all, why so few sanctioned now, I mean, yes, this could be a start, but, again, this is not a large number of people right out of the gate. Why was there such a delay in sanctioning them, and did this delay cause many of these people who are billionaires, many times over, to be able to shift their assets around and insulate themselves from being affected by this type of sanctions. Also, we still see that this administration and many members of it is loath to talk about Russian meddling in the U.S. election, to use those words.

In fact, the authority that gives this administration the ability to issue these sanctions now includes that law that was to punish Russia from meddling in the U.S. election. But when you talk to senior administration officials, they won't say that. They use the words like, you know, Russia's continued attempts to undermine western democracy. They talk about Russia's other activities, so the reasons these sanctions come now include all of Russia's bad behavior around the world, including taking over Crimea, violence in eastern Ukraine, et cetera, et cetera, but they don't name the meddling in the U.S. Election. Erica?

ERICA HILL, CNN ANCHOR: Which is fascinating in and of itself. Michelle, thank you.

I want to bring in now Michael Zeldin, CNN legal analyst, former federal prosecutor and, of course, former special assistant for Rob Mueller at the Justice Department.

As we look at all of this. I want to pick up on the point that Michelle just made there, what we're not seeing, we're not seeing that language, there is talk of a cyber threat, there's talk of a threat to western democracy. How important is that as we look at these sanctions and the real strength of them?

MICHAEL ZELDIN, CNN LEGAL ANALYST: Well, I think sanctions are sanctions, which is if they are being placed on the specially designated nationals, OFAC list that treasury has, it is prohibited from doing any dealings with these people in a commercial setting. And so, to the extent that anyone is being placed on this list, it will have a crippling impact on their ability to do business with U.S. persons around the world. So, that's an important first step.

Irrespective of what motivated the Treasury Department to put them on the list if they're on the list properly, that's really all that matters in terms of the economic impact you want on them. And there are important names on that list. The Gazprom people, there are Deripaska. These are important people in terms of dealing with the United States and ties to Manafort and Gates.

So, I think it is a good first step. We'll have to see where it goes from here. There are a lot of other names that could be on the list, especially those who are in the financial sector. Because those are the people who can be hurt most by limiting their dealings with U.S. economic interests, Treasury Department, fed, et cetera. But I'm happy that this is a -- first step that they have taken. Maybe it is a little bit too late, in some sense, but better late than never.

HILL: We'll say what we can get. Michael Zeldin, stay with us, I want to bring in Matthew Chance joining us now live from Moscow. Because Matthew, you recently, actually spoke with one of these oligarchs.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes. I mean a lot of the people who we regard as oligarchs, these business leaders in Russia, they're very, very difficult to get a hold of, and one of the most difficult, one of the most media shy is Oleg Deripaska.

[10:05:07] And he's one of the seven oligarchs that have been named on this list by the U.S. Treasury as being subject to sanction. We tracked him down in Vietnam of all places, on the sidelines of what was the ASEAN summit. And we managed to get some questions to him about his links with Paul Manafort, a key figure, of course, in the Mueller investigation. It is believed that Paul Manafort owes Deripaska millions of dollars from a previous business arrangement that they had together. And whether he was the head of the Trump campaign, the campaign manager, campaign chairman, he offered Oleg Deripaska private briefings. It is believed as a way of sort of alleviating some of that debt. I don't know if we have that sound that you can -- that you can play for us now, but anyway, it's very interesting exchange that I had with Oleg Deripaska.

(BEGIN VIDEO CLIP)

CHANCE: Oleg Deripaska, it is Matthew Chance from CNN. Is it true that Mr. Manafort owed you millions of dollars when he was the -- when he was the head of the Trump campaign? Mr. Deripaska? Did he offer you these private meetings so that he could try to repay that debt? Were you a secret back channel from the Kremlin to the Trump campaign?

(END VIDEO CLIP)

CHANCE: Oleg Deripaska, trying to, well, successfully in fact, avoiding answering the questions that -- I was trying to put to him. But he does seem to have been thrust back into the spotlight now, despite his efforts to stay out of that spotlight by making this significant appearance on this U.S. Treasury list, not only one of the seven oligarchs that have been sanctioned, but of the 12 oligarch owned companies that have been subject to these Treasury sanctions, eight of those companies are either owned or controlled by Oleg Deripaska. Even though there are other names on the list, it does seem that Deripaska has been specifically targeted by the U.S. Treasury. Erica?

HILL: Absolutely, significantly impacted there. Matthew, thank you. Michael, as I bring you back in here, walk us through just again for folks who are just joining us, so this connection which is a very important one, between Oleg Deripaska and Paul Manafort and Rick Gates.

ZELDIN: Right, so they have a long history of financial dealings based out of the Ukraine and perhaps Ukraine as it relates to Russia. As was just reported, there is an allegation of monies owed by Manafort to Deripaska and he was devouring to repay that debt by briefing him on what was going on the Trump campaign. There is thought, though not proven yet, that there may have been back channels used by oligarchs to fund the Trump campaign, and perhaps the inauguration as well.

That's what we see in Mueller's efforts to speak to these people as they arrive in the United States. We have reporting that Mueller has spoken to three of them, one with a warrant to seize their telephone, to acquire electronic data. So there is a clear connection not only between Manafort, Gates and the oligarchs, but now Mueller looking at the oligarchs directly and interviewing them in an effort to understand from their point of view what happened here. So it is a widening net for Mueller and a tightening noose for Manafort to work out an agreement with Mueller to cooperate and provide the information that Mueller seems very much to want.

HILL: Michael Zeldin, appreciate it as always. Thank you. Of course, all of this playing out against the backdrop of what is happening on Wall Street. Aside from what you're seeing there, President Trump saying this morning, listen, there is going to be a little pain in the process of cutting the trade gap with China. But the country will be stronger for it. Investors who before last night were maybe hoping that the trade war might be avoided -- well, they heard something different from the president this morning on the heels of him threatening an additional $100 billion in U.S. tariffs.

CNN's Jeff Zeleny joins us from the White House with the latest. Jeff, good morning.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good morning, Erica. There is no doubt, people at the White House here, advisers and likely the president himself, keeping an eye on the stock market. Of course, there was a lackluster jobs report this morning. But a few moments ago, I spoke to the president's new top economic adviser Larry Kudlow and he insisted again that the president is not after a war here with China.

He said this is a process. This is a negotiation. But it is quite unusual because it is playing out in public here, this back and forth, every day, $50 billion, $50 billion here and there. But, Larry Kudlow insisted the president had to do something, has to act because of theft of intellectual property. The question here is what is the next step here for the White House?

[10:10:00] You know, so much going on here, so many different agenda items on the president's plate here. This is one of many. But there are many Republicans in this town who wonder what the president plan is for this. These very public negotiations happening here, but Republicans like Ben Sasse, the senator from Nebraska, he said that hopefully the president is just blowing off steam here, but I don't think he has a plan. So that is the question particularly when Congress comes back next week. What is the president's plan here to avoid trade war? The president, of course, says some pain to be expected. The question how much pain is going to happen? A lot of it is happening in red states, actually, with spring planting season coming, in farm states. Many, many people are wondering what the president's endgame is here. Erica?

HILL: Jeff Zeleny, live at the White House for us. And speaking of that, we are heading to Wall Street next where markets are feeling the trade turmoil. Plus, the president breaking his silence on the Stormy Daniels hush money scandal. What he now has to say about that $130,000 payment. And will the president's EPA chief be the next administration official to go. All the latest headlines.

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[10:15:15] HILL: Wall Street not reacting, all that well to President Trump's threat to follow the initial $50 billion in proposed U.S. tariffs on Chinese imports with an additional $100 billion in additional tariffs.

Joining me now from the New York Stock Exchange, Cristina Alesci and Richard Quest. Cristina, first of all, walk us through what we're seeing, what is happening there on Wall Street.

CRISTINA ALESCI, CNN MONEY AND POLITICS CORRESPONDENT: Well, markets are clearly nervous, right? They see the president's language escalating against China. And we saw stocks take an immediate hit overnight when he floated the idea of additional $100 billion of tariffs on Chinese goods. Now we're seeing pairing some of the losses, stocks coming back a bit, maybe because Trump's chief economic adviser Larry Kudlow was on another network, again, reassuring the market. He seems to be a stabilizing force. And I'm hearing here Wall Street kind of likes him. So the administration does trot him out to kind of allay real fears.

But here is the thing, here is what critics are saying, provoking China is a very risky move. Because it has other levers it can pull. This is not just a tit for tat on, you know, how many billions of goods we're going to tariff or they're going to tariff. But it could pull other levers. For example, it could make U.S. businesses it can make it more difficult for them to operate in China. It could clamp down on Chinese tourists spending money here in the U.S. There are a lot of economic levers that China has and the relationship is really intertwined and that is what CEOs and traders and investors are very worried about, and it seems to be for political reasons, again, this seems to be motivated by Donald Trump really rallying his base and getting that base behind him, Erica.

HILL: And to that point, we also heard from Larry Kudlow earlier this week that this is part of a negotiation, so Richard as we look at all of this, yes, China could have other levers to pull, but when we look specifically at the tariffs, these are all proposals right now. Are investors convinced that they're actually going to take effect at this point?

RICHARD QUEST, CNN MONEY EDITOR AT LARGE: Well, they're hoping for the best and they are fearing the worst. I think they all work on the basis that no rational person would willy-nilly walk into a full scale trade war with China. So if you would drop that mentality, then you're right. They do believe that none of this will ever come to pass, and if you look at the administration's curriculum vitae on these sort of issues, they threaten hard and then walk back and come back with some sort of a deal at the end.

South Korea is a good example of it. North Korea is a good example of it. The EU is a good example of it. And NAFTA and Mexico have been sort of examples of it. So, the thinking goes that, yes, the president may be talking tough, but that ultimately the worst won't happen. But make no mistake, Erica, as Cristina was just saying, you know, they are ready here for the worst and they are fearing it.

HILL: And the other thing that we're dealing with today, Cristina, is this weaker than expected jobs report. How much of an impact is that having?

ALESCI: It is really not having too much of an impact based on the conversations that I had here on the floor. Look, bottom line, this was a big miss, no doubt about it. You know we're talking about $103,000 jobs versus the estimate of 185,000. But bottom line, the economy is still seems to be very strong, if you look at some of the indicators in their report, like wage growth, for example, so it does seem to be holding up and let me remind viewers out there. I mean, we're talking about the 90th consecutive month of job growth. This economy has been essentially on a tear for quite a while and doesn't seem the fundamentals are still in place for growth. I think everyone here is nervous about the x factor. And that x factor now seems to be the administration.

HILL: Cristina, Richard, appreciate it. Thank you.

President Trump says his EPA chief is doing a fantastic job, just as Secretary Pruitt faces growing claims of ethics violations. So could he be the next person to lose his job?

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[10:23:44] HILL: Major developments we're watching this morning. The president's lawyer filing new papers in their legal battle with a porn star, asking for more time to respond to Stormy Daniels lawsuit. This, of course, as President Trump is praising his embattled EPA chief despite growing questions about how Scott Pruitt is spending taxpayer money and what he's doing on a daily basis.

CNN's Jeremy Diamond joins me now. Jeremy, some of the newest criticism here in regards to Secretary Pruitt, these costly proposals, but also what has happened when some staffers have questioned that spending.

JEREMY DIAMOND, CNN WHITE HOUSE REPORTER: That's right. Well, what we're learning is that at least three senior EPA officials were either sidelined or demoted in some way after disagreeing with Scott Pruitt in some of the decisions that he was making with regards to spending. A lot of these decisions regard his international travel, some of his frequent travel back home to his home state of Oklahoma, as well as some of the spending, expensive spending that he saw to make regarding his office here in Washington. Two sources with direct knowledge of the matter tell me that if Scott Pruitt had heeded a lot of warnings, a lot of the negative headlines that we have seen over the last several months with regard to some of the spending and the travel could have been avoided, but instead, these officials were iced out. They involved both career officials and political appointees.

[10:25:02] One of the political appointees, Kevin Chmielewski, is a long time Trump campaign aide. He was actually one of the first hires on the Trump campaign, a senior advance official during the campaign. And he has a close relationship, even, with the president. So that is notable as far as the criticism that Scott Pruitt has faced. But despite all of that, you know, this is, first of all, not the latest -- just the latest incident involving Scott Pruitt. There was also the room that he rented for $50 a night, ethics issues around that given that he was renting it from a lobbyist couple. But despite these issues, President Trump so far sticking behind his EPA Administrator Scott Pruitt, this was him yesterday aboard Air Force One.

(BEGIN VIDEO CLIP) DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think that Scott has done a fantastic job. I think he's a fantastic person.

(END VIDEO CLIP)

DIAMOND: There are still questions, of course, surrounding Scott Pruitt and his status with the president. But we do know that as recently as earlier this week, the president, despite the series of negative headlines that Scott Pruitt has been facing, was discussing privately with aides the possibility of still replacing Jeff Sessions, his attorney general, with Scott Pruitt. This is something he's considered for a while and clearly still in the president's mind, despite these negative headlines.

HILL: And if it is all of that, the president also speaking publicly about the Stormy Daniels scandal for first time. And there is some concern here about possible legal implications.

DIAMOND: That's right. We heard from the president for the first time yesterday, and now Stormy Daniels' Attorney Michael Avenatti is saying that he has plans to refile this motion to depose the president of the United States. Let's listen in to what the president had to say and what Michael Avenatti had to say as well.

(BEGIN VIDEO CLIP)

UNIDENTIFIED REPORTER: Did you know about the $130,000 payment to Stormy Daniels?

TRUMP: No. No.

UNIDENTIFIED REPORTER: Then why - Why did Michael Cohen pay him, if there was no truth to his allegations?

TRUMP: You have to ask Michael Cohen. Michael is my attorney and you'll have to ask Michael Cohen.

UNIDENTIFIED REPORTER: Do you know where he got the money to make that payment?

TRUMP: I don't know. No.

MICHAEL AVENATTI, STORMY DANIELS' ATTORNEY: You can't have an agreement if one party claims they knew nothing about the -- one of the principle terms of the agreement. So the president has just shot himself in the foot, thrown his attorney basically, Michael Cohen, under the bus in the process.

(END VIDEO CLIP)

DIAMOND: Michael Cohen's Spokesman and Attorney David Swartz is responding in a statement. He told CNN, "This is an accurate assessment of the facts. This is exactly what I have been saying all along. That's with regards to the president's statement. Michael Cohen made the payment to protect reputation, family and business. It had nothing to do with the election." HILL: Jeremy Diamond with the latest for us there. Jeremy, thank you.

Well, as Jeremy just laid out for us there, President Trump breaking his silence on Stormy Daniels, denying that he knew anything about that hush money payment.

Here to discuss, CNN political commentators, Tara Setmayer, Jen Psaki and Matt Lewis. As we look at this, Matt, and we just heard even more from Jeremy there, his reporting. How believable is it that the president had no knowledge whatsoever of this payment?

MATT LEWIS, CNN POLITICAL COMMENTATOR: It seems highly unlikely. I don't know of an attorney who would take it upon themselves to pay off somebody who is making an allegation against you or me. In fact, one might even argue it would be a disservice to me if someone were to take it upon themselves to do it. Just stretches -- strains credulity and obviously the less Donald Trump can talk about this, the better because of the potential legal ramifications.

HILL: As we look at this, though, Avenatti jumping on this, not surprisingly claiming this is really just a big gift to him. But in the end, if part of why he was filing was for Stormy Daniels to tell her story, that's been done largely. And we heard it multiple times. She sat down with Anderson Cooper for "60 Minutes." Jen, is there a risk here that this is quickly becoming a partisan talking point?

JENIFFER PSAKI, CNN POLITICAL COMMENTATOR: Well, look, I think the fact that the president of the United States had an affair with a porn star it shouldn't be a partisan talking point, it is a reality. There are many Republicans on the Hill and elsewhere who should be as horrified as Democrats are about this situation and the handling of it, but just the mere fact of it. So I think the case here is Stormy Daniels has told her story. Could there be more she knows? Could she be out there more? Certainly. Is that helpful to the president? No, it is not, to have a porn star out there talking about their affair and that's the bottom line.

HILL: And Tara, we look at this, though, we know that the fact that there was this affair, or however you want to refer to it and then these other issues, that really hasn't affected the base at all. This is not something that is a big concern in terms of how the president conducted himself. How is it sitting, though, with the rest of the party?

TARA SETMAYER, CNN POLITICAL COMMENTATOR: Well, this is just consistent with the lack of character of Donald Trump that a lot of Republican voters knew about before they voted for him. I don't think anything at this point has been worse than the Access Hollywood tape and he won anyway, unfortunately.